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HMRC internal manual

PAYE Manual

From
HM Revenue & Customs
Updated
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Reconcile individual: un-reconciled cases: cases that will be automatically reconciled

Where the outcome of the database scans (PAYE96001) shows that CY-1 is open and

  • The case is an SA case in CY-1; the year will automatically be cleared as ‘Reconciled - SA’
  • There were no employments in CY-1 and there are no forms P11D (or other income details expected); the year will automatically be cleared as ‘Reconciled - No Employments’
  • There is an outstanding P14 for an employment that commenced towards the end of the tax year; the ‘No P14 Expected’ indicator will be set against the employment for that year only
  • There is an outstanding P14 for an employment that ceased towards the start of the tax year and it wasn’t ceased / potentially ceased by a P45 (1); the ‘No P14 Expected’ indicator will be set against the employment for that year only
  • There is a JSA employment without a P45 (1) or a P14; for cases where sufficient information is available, the scan will estimate the amount of JSA received for the year and create either a P60 or a P45 (1)
  • There is an outstanding P14 and no forms (for example P14, P11D) have been linked for that employment for a defined number of years (set by the PAYE Service); the employment will be logically deleted
  • There is only one P11D expected and it is missing the scan will use
    • the information in IABD if the employment was open for the whole year
    • apportion the information in IABD if the employment ceased during the year
    • reduce the benefits to zero if the employment ceased in the previous year.

The scan will then try to reconcile CY-1. It will use the standard rules for reconciliation with several exceptions. It will

  • Match unlinked P14 and link them
  • Ignore any employments with the ‘P14 Not Expected’ indicator
  • Use P45 (1) pay and tax when the P14 is outstanding
  • Use P60 pay and tax when the P14 and P45 (1) are outstanding
  • Use the system created JSA P60 or P45 (1) when the P14 or P45 (1) is missing
  • Use IABD figures linked to the latest CY-1 coding in place of missing forms P11D
  • Exclude any allowable expenses in IABD when the P87 has been issued but not received back
  • Use IABD figures for investment income when the P810 has been issued but not received back
  • Ignore the Inhibit Automatic Reconciliation indicator

Where the outcome of the database scans (PAYE96001) shows that CY-1 is reconciled - balanced and an earlier year is open, the scan will link forms P14 to matching employments.

The scan will then try to reconcile each open year. It will use the standard rules for reconciliation with several exceptions. It will

  • Ignore any employments with the ‘P14 Not Expected’ indicator
  • Use P45 (1) pay and tax when the P14 is outstanding
  • Use P60 pay and tax when the P14 and P45 (1) are outstanding
  • Use the system created JSA P60 or P45 (1) when the P14 or P45 (1) is missing
  • Ignore the Inhibit Automatic Reconciliation indicator

If a customer contacts HMRC to ask where the figures came from, explain that they are estimated figures based on the latest information held. Ask them to supply the correct information and we will amend the reconciliation and update their account.

When the scan has estimated the JSA the cessation source will show ITYS.

When P45 (1)s and / or P60s have been used in reconciliations and / or JSA has been estimated, appropriate Contact History notes will be made.

If the Inhibit Automatic Reconciliation indicator is set for a year and that is the only failure reason and the outcome is balanced or balanced within tolerance the year will be marked as balanced. If the outcome is under or over paid the year will be left open and work item 447 will be created.

Work items will be created for accounts where CY-1 only is open or CY-1 is balanced and an earlier year is still open after the scans have run. Only one work item will be created for each account. When working the work items there may be more than one issue on the account.